UAE regulator demands greater transparency(Financial Times): The market regulator of the United Arab Emirates called on Thursday for increased disclosure ahead of the companies reporting season, asking for extra information on companies’ real estate and financial positions.

]]>https://templewest.wordpress.com/2009/02/06/218/feed/0Temple-Westhttps://templewest.wordpress.com/2009/01/27/216/
https://templewest.wordpress.com/2009/01/27/216/#respondWed, 28 Jan 2009 02:27:17 +0000http://templewest.wordpress.com/?p=216Emerging-market telecom buyers get picky (MarketWatch): As international telecommunications operators shelve expansion plans to preserve cash and the myth collapses that emerging-market economies are independent from their western counterparts, the face of dealmaking in telecom is changing rapidly.

Emerging markets face capital squeeze, action needed: IIF (Reuters): Private capital flows to emerging markets are set to drop by nearly two thirds in 2009 as the global economy makes its most extreme downturn since World War Two, the Institute of International Finance said on Tuesday.

The IIF is an association of financial services firms with 400 members worldwide.

]]>https://templewest.wordpress.com/2009/01/27/216/feed/0Temple-WestChina’s growth slows as Geithner stirs currency concernshttps://templewest.wordpress.com/2009/01/22/chinas-growth-slows-as-geithner-stirs-currency-concerns/
https://templewest.wordpress.com/2009/01/22/chinas-growth-slows-as-geithner-stirs-currency-concerns/#respondFri, 23 Jan 2009 01:42:00 +0000http://templewest.wordpress.com/?p=213Chinese Shares in U.S. Fall to 2-Month Low on Growth Concern(Bloomberg): Chinese stocks trading in the U.S. fell to the lowest in two months, led by commodity producers, after the world’s third-largest economy grew at the slowest pace in seven years.

The nation’s leaders “will do anything” to maintain an economic expansion of about 8 percent, the government’s target for creating jobs, said Huang Yiping, Asia economist at Citigroup Inc. in Hong Kong. The economy grew 9 percent for all of 2008 after a 13 percent expansion in 2007.

I do believe it is a significant issue. As I said earlier, I believe it is important for the United States and the global economy that our major trading partners operate with a flexible exchange rate system and that market forces determine the level of those exchange rates. I think that’s very important, and …when I have some time to think through how best to achieve that objective look forward to a chance to work with you and your colleagues on the committee on how we do that.

On Thursday, Geithner submitted written answers to the Senate Finance Committee.

Obama believes China manipulating yuan: Geithner(Reuters): President Barack Obama believes China is “manipulating” its currency, his choice to head the U.S. Treasury said on Thursday using a term the Bush administration had deliberately avoided for years to describe Beijing’s foreign exchange practices.

Under U.S. law, labeling China as a currency manipulator would require the Treasury Department to begin “expedited” negotiations with Beijing — either bilaterally or through the International Monetary Fund — to reduce China’s huge trade surplus with the United States and eliminate any “unfair” currency advantage.

Rookies make rookie mistakes. Our new President is not immune to this disease.
This is a situation where the US has known for a very long period of time that China has managed it’s currency. The US chooses not to name China as a manipulator for two reasons. One, China doesn’t meet the Treasury’s narrowly defined criteria. Two, China owns a lot of US Treasury, Agency, and overall debt securities. To engage in any action that would lead the Chinese to misunderstand actions by the US and therefore sell these holdings would be dangerous. But rookies do what rookies do: they make mistakes.
If this is indeed the new tactic being taken by the Obama administration, they will generate a weaker US currency and higher US bond yields. Not exactly what they should be doing in their first 100 days in office. This is the Obama’s first brush with the markets and they will quickly learn to exercise discretion in the future.

During his trip to China in December, Henry Paulson handled this issue with care while making the U.S. interests felt among Chinese leaders. Geithner has pushed the envelope. Nothing may come of this as both countries are stuck in an economic recession. The concern that China will sell its Treasury portfolio may be exaggerated. Who would they sell to and what would they buy?

He said Brazil, China and Turkey were very attractive markets in the current environment, as these economies stood to gain from monetary changes. “In Turkey, exports have been impacted by what’s happened in Europe, but they have quite a vibrant domestic economy and tourism,” he explained. “The key factor is the global decline in inflation and interest rates – Turkey has suffered from high interest rates in the past,” he said. “This decline is very good news for Turkey, which is one of the reasons why we’re pretty bullish.”

]]>https://templewest.wordpress.com/2009/01/20/civil-unrest-can-test-emerging-markets-mobius-says/feed/0Temple-WestRussia’s currency edges closer to disasterhttps://templewest.wordpress.com/2009/01/19/russias-currency-edges-closer-to-disaster/
https://templewest.wordpress.com/2009/01/19/russias-currency-edges-closer-to-disaster/#respondMon, 19 Jan 2009 22:56:18 +0000http://templewest.wordpress.com/?p=206Ruble Drops to Pre-1998 Crisis Low on 6th Devaluation This Year (Bloomberg): The ruble fell below the weakest level during the 1998 Russian crisis after the central bank devalued the currency for the sixth time in seven days to protect reserves.

Shanghai glistens in the gloom (Reuters): Shanghai was the only bright spot in a gloomy week for Asia-Pacific equities as sentiment improved amid growing bank loans and hopes for a stimulus plan for China’s machinery makers.

Satyam saga jolts Sensex (Economic Times): The Satyam financial fiasco has dragged down the Indian stock market to its fifth biggest fall in percentage terms in the last 14 years, a SundayET analysis. Even the recent Mumbai terror attack (26/11), attack on America’s World Trade Centre (9/11), and dot com bubble burst had lesser impact on Dalal Street.

The Sensex fell as much as 7.25% on January 7, 2009, after Satyam Computer Services’ erstwhile chairman B Ramalinga Raju confessed to an accounting fraud. The analysis captures how the Indian equity market behaved in the face of major events in Indian history. For the calculation, closing index figures have been considered since 1995.”

]]>https://templewest.wordpress.com/2009/01/10/satyam-scandal/feed/0Temple-Westhttps://templewest.wordpress.com/2009/01/05/199/
https://templewest.wordpress.com/2009/01/05/199/#respondTue, 06 Jan 2009 03:05:16 +0000http://templewest.wordpress.com/?p=199Emerging Markets – Economic stimulus plans aid stocks, bonds (Reuters): Emerging market stocks, bonds and currencies rose on Monday on expectations of interest rate cuts in the new year and a major U.S. economic stimulus package that would help lift the global economy out of its doldrums.

Brace yourself: Political-market risks in 2009 (Reuters): There are a number of macro risks that will continue to grab headlines in 2009, including the conflicts in Afghanistan and Iraq, cross-border tensions and state instability in Pakistan, and Iran’s ongoing quest to develop advanced nuclear technologies.

Chinese companies go abroad (Seking Alpha): Just as a good China strategy is increasingly important to the continued growth and competitiveness of MNCs worldwide, expansion overseas is a top priority for many of China’s leading firms.

By Shaun Rein with China Market Research Group.

]]>https://templewest.wordpress.com/2009/01/05/199/feed/0Temple-WestBooms, busts and a bottom?https://templewest.wordpress.com/2008/12/27/booms-busts-and-a-bottom/
https://templewest.wordpress.com/2008/12/27/booms-busts-and-a-bottom/#respondSat, 27 Dec 2008 20:48:08 +0000http://templewest.wordpress.com/?p=196Boom, Bust, Repeat (NYT book review): For the past two decades, Michael Lewis, the most charming and one of the shrewdest guides to America’s raucous money culture, has displayed a knack for being at the right place at the right time. He was a young trader on the Salomon Brothers bond desk during the 1987 crash; the experience led to “Liar’s Poker.” His boss at Salomon, John Meriwether, a decade later became a central figure in the downfall of the hedge fund Long-Term Capital Management. Lewis spent a chunk of the 1990s in Silicon Valley, where he profiled the serial entrepreneur Jim Clarkin “The New New Thing” and happened on to his next great subject, the Oakland A’s (“Moneyball”). Now, just in time for the Great Credit Debacle of 2008, Lewis has curated “Panic,” a prose exhibition on the past 20 years of monetary madness.

Michael’s most recent article in Portfolio is a fantastic profile of an investor who bet on the housing bust and is traumatized by how awfully right he was. It’s quite amazing how he’s still able to milk the story of his job 20 years ago for profits.

Be careful with advice that is not supported with evidence. Mobius sounds confident that the low interest rates will be enough to bounce stock prices off their bottom. Low interest rates spur BUBBLES not organic demand. There may be bargains, but this may not be the bottom. In the same article, Arnab Dasof Dresdner Kleinwort said emerging markets may not recover next year.

“Possibly the whole year will be a very difficult year for the entire global economy, especially emerging markets,” Das, the global head of emerging-markets research at Dresdner Kleinwort.”

]]>https://templewest.wordpress.com/2008/12/27/booms-busts-and-a-bottom/feed/0Temple-WestLessons from India and Chinahttps://templewest.wordpress.com/2008/12/21/lessons-from-india-and-china/
https://templewest.wordpress.com/2008/12/21/lessons-from-india-and-china/#respondSun, 21 Dec 2008 21:59:41 +0000http://templewest.wordpress.com/?p=192Talking Business How India Avoided a Crisis (NYT): “What has taken a number of us by surprise is the lack of adequate supervision and regulation,” Rana Kapoor was saying the other day. “This was despite the fact that Enron had happened and you passed Sarbanes-Oxley. We don’t understand it. Maybe it’s because we sit in a more controlled economy but ….” He smiled sweetly as his voice trailed off, as if to take the sting off his comments. But they stung nonetheless.

India has avoided direct exposure to the credit crisis with a cultural aversion toward credit and with an anti-inflation, anti-Greenspan central banker, Y.V. Reddy.

China to the Rescue? Not! (NYT): I had no idea that many of those oil paintings that hang in hotel rooms and starter homes across America are actually produced by just one Chinese village, Dafen, north of Hong Kong. And I had no idea that Dafen’s artist colony — the world’s leading center for mass-produced artwork and knockoffs of masterpieces — had been devastated by the bursting of the U.S. housing bubble. I should have, though.

We’re going to have to get out of this crisis the old-fashioned way: by digging inside ourselves and getting back to basics — improving U.S. productivity, saving more, studying harder and inventing more stuff to export. The days of phony prosperity — I borrow cheap money from China to build a house and then borrow on that house to buy cheap paintings from China to decorate my walls and everybody is a winner — are over.”

Thank you Mr. Friedman.

]]>https://templewest.wordpress.com/2008/12/21/lessons-from-india-and-china/feed/0Temple-WestEmerging markets undervalued, analysts say, but ignore oilhttps://templewest.wordpress.com/2008/12/20/emerging-markets-undervalued/
https://templewest.wordpress.com/2008/12/20/emerging-markets-undervalued/#respondSun, 21 Dec 2008 00:31:02 +0000http://templewest.wordpress.com/?p=185Emerging Market Stocks to Outperform, Garner Says: Chart of Day (Bloomberg): Emerging-market stocks are a better buy than those of more developed regions because their economies will rebound more quickly from the global slowdown, according to Jonathan Garner, a strategist at Morgan Stanley.

Since October, emerging stocks have begun to close the gap on developed-market stocks, a trend that will continue next year, Garner says. But where? And how will the relationship with oil affect these stocks?

Looking Ahead: Emerging markets remain attractive (The Economic Times): Given the steep market decline, investors have begun to shift their focus to the increasingly attractive valuations in emerging markets. Many markets are trading at single-digit price-to-earnings ratios, with many companies trading at below their net asset value. Stock prices rebounded in December, as investors sought to benefit from the attractive investment opportunities in the asset class.

Dr. Joseph Mark Mobius and Garner both say the emerging markets are undervalued, but so is oil right now. These guys don’t even mention oil or other commodities for that matter. Obviously some countries aren’t relying on oil (China and India) and will benefit from the low prices. But do we need an equilibrium before stocks rebound?

Brazil Bank Estimates Cut at Goldman Sachs on Rates (Bloomberg): Brazilian banks had their 2009 and 2010 earnings forecasts cut by Goldman Sachs Group Inc., which said a drop in lending rates will lower profits while an economic slowdown curbs loan growth.